FLASHBACK NOTES// CLASS XII
MARKETING// TOPIC: PROMOTION
MEANING OF PROMOTION
Promotion focuses on communicating with the target
market. Promotion, thus, informs, persuades and reminds the
target group of the availability of the product, the place where it
is available, and the price of the product. Thus it
includes the Integrated Marketing Communication, the
Process of Communication, and the promotion mix or the tools to
promote product, service or idea.
IMPORTANCE / FUNCTIONS OF PROMOTION
1.Information: It informs (awareness and education) customers about the launch of new
product/service/idea and the place of availability.
2.Persuasion: The promotion is to persuade the customers to use one particular brand in
this brands- cluttered world.
3.Remind: Promotion has to continuously remind the customers of the brand and enforce
customer loyalty, It is true not only during normal times, but even when the product is in
shortage, so that customers do not forget your brand.
4.Relationship: Promotion is meant to create relationships through constant promotion and
involvement of customers with the marketer so as to create a lifetime relationship with
them.
5.Adds value: Promotion creates value by influencing consumers’ perceptions.
6.Assists other company efforts: Promotion accomplishes goals, assists sales
representatives, and enhances the results of other marketing communications.
TYPES OF PROMOTION MIX
Promotion can be of two types – Above-the-Line (ATL) and
Below-the-Line (BTL). ATL communications use the broadcast
medium and publish to mass audiences while BTL activities Types of Promotion
are more focused such as in-store activations and melas.
“There has been a gradual shift to below-the-line activities,
Above the Line
firstly because above-the-line (ATL) activities are
prohibitively expensive. A full television campaign alone costs
anywhere between 10 crore to 12 crore for a single product Below the line
launch.
ELEMENTS OF PROMOTION MIX
Most of the writers on marketing have identified four elements of promotion mix,
viz., Advertising, Sales promotion, Public Relations and Personal selling. However, Kotler have
identified eight elements of promotion mix – Advertising, Sales Promotion, Events
and Experiences, Public Relations and Publicity, Direct Marketing, Interactive Marketing
(online), Word-of-Mouth Marketing and Personal selling.
All the eight elements can be included into the following five elements:
Advertising and Word-of–Mouth Communication
Sales Promotion
Direct marketing and online Marketing
Personal Selling
Public Relations and Sponsorship
Creating a balance between various tools of promotion is known as integrated marketing
communication.
ADVERTISING AND WORD-OF –MOUTH COMMUNICATION
Advertising refers to any paid form of non-personal
presentation and promotion of ideas, goods, or services
by an identified sponsor. This concept has four elements:
Payment, non-personal, Identifiable source, and Ideas,
products and services.
“Word of mouth communication has always been
popular in penetrating markets. Opinion leaders or
influencers are now becoming important element in
marketing strategies of new product developers as well
as existing products. Presently, there is a whole lot of
communication between a potential customer and the
other existing customers. Today, the truth about the
product is discussed by people who have experienced it
themselves.
SALES PROMOTION
“Any activity which aids value to a product or service for a
limited time period by offering an incentive to purchase” Thus
sales promotion is about ‘extra benefit’ offers or value addition
to make an immediate purchase. It is different from
advertising, personal selling, and public relations. However, to
inform of sales promotion help of advertising is often taken to inform of the schemes.
DIRECT MARKETING AND ONLINE MARKETING
Direct marketing refers to ‘any advertising activity
which creates and exploits a direct relationship between
the marketer and its prospects or customer as an
individual. In nutshell, direct marketing is “a custom tailored
marketing approach in which the company’s objective is to
build lasting relationships with carefully targeted individual
consumers or buyers in narrowly defined segments and –
using detailed customer information from a computerised
database and direct communication tools such as direct mall, the telephone and Internet –
to generate as immediate, measurable response. Other names, of direct marketing are
‘curriculum marketing’, ‘dialogue marketing’, ‘personal marketing’, ‘relationship marketing’,
and ‘database marketing’ have been in currency.
PERSONAL SELLING
Personal selling is an important element of promotion
mix, a part of 4Ps. Personal selling is a paid, two-way
communication and to persuade customers through
information to buy products in an exchange situation.
Direct selling through telemarketing (over the telephone),
relies heavily on personal selling.
PUBLIC RELATIONS AND SPONSORSHIP
Public Relations is a broad set of guidelines which makes use of advertising, annual
reports, brochures, event sponsorships, and undertaking social projects like helping poor
and environment to build or maintain a favourable image with its various publics. Thus,
PR is a generic term for a range of specialist and
sophisticated skills involved in communication
with publics through, primarily, broadcast,
published media.
Sponsorship like other marketing activities is
more than a century old. It entered the oxford
Dictionary around 1930. Sponsor is an individual or
an organisation that provides financial support in kind
for an event or to an organisation for the commercial
advantage and reaches the business goals.
MODES OF ADVERTISING
There can be different modes of advertising
1. Print Media: It consists of national newspapers, english dailies, vernacular papers,
consumer magazines, trade journals, technical journals, professional journals, directories
and yearbooks.
Print Media
Print media is a form of communication in which marketer
persuades, informs and remind the customer as well as potential
customer by using written communication medium such as
newspapers, magazines, periodicals etc.
Advantages and Disadvantages of various types of print
media, online media, visual media.
Advantages of Print Media
1. They reach every corner and have a high coverage Consumers use whenever they get time.
2. Advertising in any of the print media is comparatively a cheap method of advertising from
cost point of view
3.It offers a lot of flexibility according to the convenience and necessity of the advertiser as the
shape and size of advertisement can be changed.
Disadvantages of Print Media
1. The life of a print media advertisement is extremely short so frequent advertisement are
required to be published.
2. Visual effect may not be created in practice as the paper quality is not always upto the
mark.
3. Illiterate people might find it difficult to comprehend and understand the advertisement
via print media.
Online Media
It is the promotional strategy adopted by many companies in the
modern era to interact with the buyer using technology as a
medium with internet connection and required hardware.
Example: Flipkart, Amazon and Big Basket.
Advantages of Online Media
1. It offers a platform for a two way interaction between the buyer and seller without physical
presence.
2. In comparison to the wide reach it is a less costly source.
3. Demonetisation, November 2016 has increased the importance of online media.
Disadvantages of Online Media
1. Technical knowledge and working internet connection is required at all times. .
2. It requires media literacy to operate an online media.
Visual Media
It is a form of advertising in which both literate and illiterate people
can be considered as potential customers. Visual effect are very high in
this form of advertising and it provide better appeal of product or
service to the customers.
Advantages of visual media
1. Coverage of Visual media is extremely high as it can be understood by both illiterate and
literate people.
2. It easily catches the attention of the buyer and persuade them to use a product or service.
3. It is a flexible form of advertisement and can be used according to the need i.e. Local
level or National level.
Disadvantages of visual Media
1. It involves a high cost on production and circulation of a visual advertisement .
2. It requires visual aids which are expensive.
Print Media
Newspaper Magazine Yellow Page
Advertising Advertising Advertising
Advantages of Newspaper Advertising
1. In-depth coverage
2. Mobility
3. Results assessable (coupons)
4. Improved printing due to availability of better technology
5. Cheapest in per capita viewing
6. Flexibility of immediate insertion
Limitations of Newspapers
1. Short shelf life, newspapers are read only once
2. Poor print limits creativity
3, Advertisement space may be expensive and Passive medium
4. No audio-Video element
5. Literate people can only understand the advertisement.
6. Every advertisement has to compete against the clutter of other advertisers
Advantages of Magazine Advertising
1. Permits easy reach to niche markets
2. High reader involvement means that more attention will be paid to the advertisement
3. Magazines provide products a boost in esteem and prestige
4. Magazines have a more shelf life
Limitations of Magazine Advertising
1. Long lead time
2. There is limited flexibility in terms of an ad placement and
format
3. Space and advertisement layout costs are higher
Advantages of Yellow Page Advertising
1. Number is many and widely distributed
2. Non-intrusive
3. Advertisements are reasonably inexpensive
Limitations of Yellow Page Advertising
1. The Internet has led to less usage of Yellow Pages
2. Pages look cluttered as same category ads appear on the same page
3. Advertisements slow to reflect market changes
2. Radio
Radio is everywhere and it cannot be ignored. FN Currently there are 248 FM channels. It
reaches 350 million in 91 cities.
Advantages of Radio Advertising
1. Radio is selective and has the ability to reach segmented audiences.
2. Radio is economical due to large penetration and rates
3. Radio is fast due to short lead times
Limitations of Radio Advertising
1. Increase in Clutter
2. No visuals
3. Lack of proper attention as listeners give attention to other aspects
3.Television Advertising
Nowadays everything is advertised on TV.
Advantages of TV advertising
1. Product can be shown in use
2. Ability to use humour is increased.
3. Appeals to retailers
4. Realism (because of colour, sound and action)
Limitations of TV Advertising
1. Rapidly escalating advertisement cost
2. Zapping with remote control
3. Non-availability of timing
4. Mobiles & Telephones (Telemarketing)
Today it constitutes 15-20% of media plan today.
Advantages of Telemarketing
1. Cost efficient in delivery
2. Less intrusive than the phone calls
3. Place & time independence
4. Direct response
Limitations of telemarketing
1. An increased number of people are averse to telemarketing
2. More people are using technology to screen out unwanted callers
3. If outsourced, there is less control in the process
5. Cinema Advertising
Movie halls and multiplexes use it for revenue generation.
Advantages of Cinema Advertising
1. Captive audience
2. Longer video
3. Larger screen
Limitations of Cinema Advertising
1. Only selective audiences who visit the hall witness the advertisement.
2. High distractions
3. High costs
6. Out-of-Home Advertising
When people think of out-of-home advertising they usually think of colorful billboards along
the streets and highways. Included in the out-of-home classification, however, are benches,
posters, signs and transit advertising (advertising on buses, subways, metros, taxicabs and
trains).
Advantages of out-of-home advertising
1. Reach to audience
2. Size and dominance
3. Different colours can be used
4. Mass viewing
Limitations of out-of-Home Advertising
1. It draws 2-3 seconds of a reader’s time, hence it is a glance medium
2. Messages must be brief to fit in 2-3 seconds time frame
3. It is not conducive to a very short, weeklong camp
7. Other Modes
Other modes include cable advertising, Direct Mail advertising, specialty advertising
(key chains, calendars, computer mouse, mugs etc), pay per click advertising, social
media advertising. Banner advertising, advergaming etc.
Role/ Importance/objective of Sales Promotion
UIK Institute of Sales Promotion has defined sales promotion as “Any activity which aids value
to a product or service for a limited time period by offering an incentive to purchase.”
Objective of Sales Promotion
1. Increased trial: Existing customers will increase the sales volume as they will buy in
bulk.
2. Increasing Loyalty: Loyalty keeps customers buying even when it is no more the
cheapest and the best.
3. Widening Usage: Here the marketer has to tell the users of other uses.
4. Creating Interest: Value promotions that create interest are characterized by humor,
inventiveness, typically and style through - being the first to offer a new product as a
promotional medium, linking up with a new celebrity or relevant charity or finding a
totally new way to do something that people enjoy doing.
5. Creating awareness: Though this job is left to advertising, but there are number of sales
promotions very effective at making people aware of products through joint promotions
with other product or service which is already well known in the market.
6. Deflecting Attention from Price: It may lead to price wars which have a destructive
effect on firm’s profitability
7. Gaining Intermediary Support: Specific programmes directed at wholesalers, retailers,
agents, distributors to gain distribution, display and cooperative advertising, introducing
new customers, sales promotion is a must.
8. Discriminating among users: Usage varies from time to time. In case of airlines, train
companies, and leisure facilities, customers are motivated by price. They book early and
on-line. Particular groups are given additional benefits.
9. Restoring Brand Perceptions and deflecting attention from Complaints after
operational Mishandling of customer accounts: The companies offer special sales
promotion benefits to those who complain.
TYPES OF SALES PROMOTION
Price Promotion
Prize Promotion
Premium Promotions
Off the shelf offers
Hybrid Sales Promotion
1. Price Promotions: Indian print and electronic media are often full of such advertisements
and these promotions include - Up to 51% off. In India this is very popular especially at the
end of season.
Extra Fill Packs - 20% extra free, i.e., extra fill without any additional charge.
Free Offers - Buy two pieces and one piece is free, i.e., extra unit free.
Reduced Shelf Price - The most common form of price promotion is reduced Shelf
Price.
Reduced Price Offers( RPOs) - RPO are flashed on-pack, offering a saving (Rs 10)
Cash Rebates -The customer is invited to collect tokens from a number of packs
and send them to receive cash voucher.
Cash Share-Out - A sum of fixed money is divided among all those returning the
requisite number of proofs of buying the product or service.
Discounts - On single unit of higher value purchase sales through discount coupons
is made.
Repurchase Offers- Manufacturers of consumer durables, like cars, fridges, stereos
are offered a commitment by them to buy back at a specified in the future.
Frequent-user incentive - Most of the airlines offer this facility to their fliers.
Economy class fliers can use free miles to upgrade their tickets.
Coupons - Issue of coupons is very popular way of sales promotion.
Sale - A sign on store item ‘sale’ can increase sales by 50%, even if the price is
unchanged
Finance Deals - Many manufacturers, especially, the consumer durables, give
either interest free facility or finance at low rates to buy the product.
2. Prize Promotions: Prize Promotions include free prize draws, sweepstakes, and
competitions.
Free Prize Draws (and lotteries): It involves putting the names of all the entrants in
a computer and deciding winners by chance.
Sweepstakes/Games: “A sweepstake is a contest where the distribution of prizes
is dependent on random distribution of predetermined winning tickets.” The
participants exercise no control.
Competitions: A competition is a contest where the winner is determined on the basis
of exercise of skill.
3. Premium Promotions: In this kind of sales promotion, the benefit comes with an item of
merchandise .It may be On-packet Offers, with Purchase Premiums, Self-Liquidating
Offers, Free Mail-Ins, Partner Promotions, Charity Promotions, and Tailor-Made offers.
4. Off-the Shelf Offers: The leading off-the-shelf offers can be:
Free Accommodation - Particularly for hotel industry , the offer now extends to be
“two nights for price of one.
Holiday Vouchers - Some companies give cash discount, traveller cheques, duty-free
shopping voucher, etc.
Discount coupons: In India firms like include Snapdeal.com, Sodexo, etc
provide discount coupons which can be redemable. Snapdeal.com provides discount
vouchers for health and beauty, entertainment and adventures, mobiles, apparel,
lifestyle, electronics and travel categories.
Two-for One Flights: Especially budget airlines offer this facility.
Insurance Offers - Mostly the car manufacturers provide free insurance for the
first year as part of sales promotion during sleek season.
5. Hybrid Sales Promotion: Today many countries try to improve their national image through
Trade Fairs.
Difference between Advertising and Sales Promotion
Basis Advertising Sales Promotion
Pursuits The pursuits of advertising are of long The pursuits of sales promotion
term are of short term
Cost Advertising is costly Sales Promotion is cheaper as
compared to advertising
Suitability Advertising is suitable for medium to Sales promotion is suitable for
large firms large firms
Medium Advertising is done through Sales Promotion is done through
Newsprint, T.V, Radio & Outdoor discount coupons, free stuff,
Publicity etc. tasting, contests, events, meets
etc.
Results Result of advertising are slower Results of sales promotion is
faster
Difference between Personal Selling and Sales Promotion
Basis Personal Selling Sales Promotion
Objective Objective of personal selling is to Objective of sales promotion is to
create awareness increase the sales
Interaction Personal Selling is face to face Sales Promotion has no interaction
interaction
Cost It is expensive as it needs sales force Sales Promotion is a bit less expensive
training and dedicated persons as compared to personal selling
Products Personal Selling is used for products Sales Promotion is used for products
having the characteristics of high having the characteristics of low value
value or custom made. or easy to understand usage
Customers Personal Selling is used in markets Sales Promotion involves use in
with less potential customers or markets where a large number of
customers with high purchasing customers exists.
power
Factors affecting the selection of Promotion Mix
There is no perfect promotion mix. Everyone has to devise a mix depending upon the situation.
It has to be tailor-made depending upon the characteristics of the situation.
1. Push and Pull Strategies: The purpose of promotion is to motivate and persuade
not only the ultimate consumers, but also the intermediaries involved who make
available goods finally to consumers.
If the strategy adopted is to motivate and persuade the intermediaries’ to make
effort to increase the sales the strategy is called push strategy. The push strategy is
closely related to the “Selling Concept”.
On the other hand, the pull Strategy emphasizes on consumers. If the customer
demands particular goods from the retailer and the retailers want the same
from the wholesalers and the wholesalers in turn asking the manufacturers to
provide that kind of goods. Thus here it is the customer to wholesaler who is
pulling the cord. However, to be more successful, a combination of the two is required.
2. Product Features: Use of a particular tool of promotion mix depends upon the type
of goods to be marketed. For industrial products more of personal selling is required.
For consumer products like HUL’s Axe, more of advertising is required.
For highly image-oriented products like fashion garment the presence of designers or
celebrities inside the store is required.
For seasonal products, off-season sale is very important, but advertising is required for
round the year sale For low convenience goods marketers use advertising rather than
personal selling.
3. Stage of the Product Life Cycle: In different phases of a product life cycle different
tools of promotion mix become more effective.
In the introductory stage to create awareness among the customers including
business customers and distributors advertising has to be undertaken in a big
way. Free samples may be distributed to
consumers and trade promotion may be undertaken to motivate distributors to stock
the goods.
In the growth stage, the consumers have already heard of the product
During the maturity stage, the emphasis will be on switching of customers from
competitors and hence more of sales promotion is used.
In the decline stage the firm will be more interested in harvesting revenue as much as
possible. There will be great decrease in expenditure on promotion.
4. Buyer Readiness: If the customer is unaware of a product, advertising and
public relations are more important, but when he is in the marketplace sales
promotion and personal selling are more important to make a decision.
5. Type of Buyer: Buyers can be of different types and promotion mix has to be
devised accordingly. In case of Organisational or business buyers, ads published in
specialized trade publications and personal selling are more important; whereas,
consumers are swayed by glossy advertisements endorsed by some celebrities.
6. Type of Distribution: For intensive distributable goods, more advertising is done
and also the help of sales promotion is taken. For goods sold through selective
distribution, the promotion mix would vary, and for exclusive distribution like Rado
Watch, high-quality furniture, need more of personal selling.
7. Promotion Objectives, Budget, Cost and Availability of Media: Firm’s
promotional objectives are reflections of overall marketing objectives. If the objective is
to make mass awareness, the firm may go in for advertising, sales promotion and
public relation.
Apart from objectives the promotion mix would be determined on the basis of
budget made available to marketing department. If it is small the firm would
concentrate on personal selling.
8. Digital Dimension: Over the last 10 years, the speed and depth of information access
has changed. The marketers and advertising agencies have to grapple with the speed of
digital medium. It is about understanding the digital media as human beings
rather than as techies. Of course, the marketer should understand technology, but
after that as to how consumers relate to it.
9. Elections: Election meetings offer a captive audience. Tata Global and Hero MotoCorp
along with Coca-Cola and CavinKare are planning on pushing low-priced products. In
2013, HUL had organised promotion. Mass public events offer good opportunity
to engage in marketing exercises. In rural markets Products often slow at election
time as people are busy with rallies. Moreover, hoardings and billboard costs go up
since political parties too have started putting their ads.
